Oregonian: Rep. Greg Walden moves to kill $1 trillion coin1/8/13
by Charles Pope
January 8, 2013
WASHINGTON - Rep. Greg Walden has never expressed an opinion about the ill-fated Susan B. Anthony dollar coin, but on Monday he left no doubt about his feelings on that ill-fated coin's possible successor (slightly adjusted for inflation.)
"This scheme to mint trillion dollar platinum coins is absurd and dangerous, and would be laughable if the proponents weren’t so serious about it as a solution. I’m introducing a bill to stop it in its tracks,” Walden said.
You heard that right - a $1 trillion coin.
Walden thinks it's a stupid, even dangerous, idea and now he's offering legislation to make sure the newest member of the nation's currency never moves beyond the wide-eyed notion of some economists and lawmakers.
"My bill will take the coin scheme off the table by disallowing the Treasury to mint platinum coins as a way to pay down the debt. We must reduce spending and get our fiscal house in order,” he said.
Confused? Don't feel bad. This is one of the more interesting and yes, unlikely ideas to bubble up as the nation and Congress look for ways to avoid bumping into the debt ceiling.
Walden's bill comes in response to one of the more novel suggestions for helping the nation avoid default if Congress fails to raise the debt limit. The idea is this: Under law, Treasury Secretary Timothy Geithner could order the U.S. Mint to produce $1 trillion platinum coins that would then be deposited in the Federal Reserve. Under current law this can be done.
The law limits how much paper money the United States can circulate at any one time, and there are similar boundaries on how many gold, silver and copper coins the country can produce. There is no mention on platinum.
Under the theory, once produced President Barack Obama would order the Fed to hold the coins which means the county would suddenly and magically have trillions of dollars of new money on it's books.
Very simple. Very clean. And according to Walden, very wrong. "This scheme to mint trillion dollar platinum coins is absurd and dangerous, and would be laughable if the proponents weren’t so serious about it as a solution. I’m introducing a bill to stop it in its tracks,” he said Monday in announcing his legislation.
As Walden sees it, it's a crazy, bogus idea. And yet, these are odd times. Rep. Jerrold Nadler, D-N.Y., has given credence to the idea. So has Nobel Prize winner economist and New York Times columnist Paul Krugman.
There's also a formal petition submitted to the White House's website that has 4,922 signatures as of Monday.
It says if Treasury deposits "a new platinum coin with a value of $1 trillion US Dollars, we would avert the absurd-yet-imminent debt ceiling face-off in Congress in two quick and simple steps! While this may seem like an unnecessarily extreme measure, it is no more absurd than playing political football with the US -- and global -- economy at stake."
Bloomberg columnist Josh Barro has noted the idea too, writing that any mechanism to avoid default in the age of a partisan and dysfunctional Congress should be considered.
As Barro pointed out, platinum was seen as a niche (if that) category. But desperate times may require desperate measures.
"This law was intended to allow the production of commemorative coins for collectors. But it can also be used to create large-denomination coins that Treasury can deposit with the Fed to finance payment of the government's bills, in lieu of issuing debt," he wrote Jan. 3.
For all the wonky humor surrounding the idea, there's a serious aspect too. The nation is expected to reach its current debt limit of $16.394 trillion in early February. If Congress does not raise the limit the nation could default on its obligations, triggering an economy crisis that would spread across the globe.
With such high stakes and such dysfunction in Washington, a wide variety of ideas are being floated, even oddball ones.
Walden says there's a better and more traitional way - cut spending.
“My wife and I have owned and operated a small business since 1986. When it came time to pay the bills, we couldn’t just mint a coin to create more money out of thin air. We sat down and figured out how to balance the books. That’s what Washington needs to do as well," he said.
And if that's done, there might be enough left over for a tip, one that can be paid in paper or coins.